Abstract
Are entrepreneurial cultures stable over time? In this paper, we use historical measures of the outgrowth of entrepreneurial culture in China and test whether these correlate with entrepreneurial activities today. We employ provincial panel data from China documenting the regional distribution of entrepreneurial activities during the Ming Dynasty (1368–1644) and the Qing Dynasty (1644–1912) and private firm activities in post-reform China (1992–2012). Our study finds a significant association between the regional distribution of historical and current measures of entrepreneurship, supporting (1) the long-term stability of underlying regional cultural differences; and (2) the adaptability of entrepreneurial activities to changing institutional arrangements and relative payoff structures. These results are robust to numerous alternative explanations, including geography, agglomeration advantages, education, and technology. Our findings suggest that government efforts to encourage new business ventures—if they are to have more than short-term effects—will need to take into account local cultural norms.
Highlights
Are entrepreneurial cultures stable over time? In this paper, we use historical measures of the outgrowth of entrepreneurial culture in China and test whether these correlate with entrepreneurial activities today
Since it is our interest to show that jinshi, guilds, and modern private firm activities all share a distinct and durable local cultural dimension and are not merely defined by state capacity or socioeconomic predictors, we combined our core variables of interest with a standard set of variables commonly believed to influence entrepreneurial activities
If entrepreneurial culture is stable over time, we would expect to find that jinshi, guilds, and private entrepreneurship share high loadings on the same component, but less so with other socioeconomic variables reflecting non-entrepreneurial activities
Summary
Are entrepreneurial cultures stable over time? In this paper, we use historical measures of the outgrowth of entrepreneurial culture in China and test whether these correlate with entrepreneurial activities today. Our study finds a significant association between the regional distribution of historical and current measures of entrepreneurship, supporting (1) the long-term stability of underlying regional cultural differences; and (2) the adaptability of entrepreneurial activities to changing institutional arrangements and relative payoff structures. These results are robust to numerous alternative explanations, including geography, agglomeration advantages, education, and technology. We shift attention to the question of whether different local cultures— evidenced by differences in the regional supply of entrepreneurial talent—are associated with the uneven revival and development of private firms in China, and their continuing uneven spatial distribution. We build on Baumol’s theory of entrepreneurial talent allocation (Baumol, 1990; see Murphy, Shleifer, & Vishny, 1991) to develop a test of the long-term stability of regional entrepreneurial cultures and their impact on withincountry variation in entrepreneurial activities
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